TMI Blog2007 (11) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... rsonal penalty of Rs. 25 lakhs under Rule 13 or the Cenvat Credit Rules, 2002 on M/s. Essar Steel Ltd. In addition, personal penalty or Rs. 2.50 lakhs stands imposed on Shri Ramesh Patil, Manager (Excise) of M/s. Essar Steel Ltd. in terms of the provisions of Rule 26 of the Central Excise Rules, 2002. 2. As per the facts on record, the appellants imported a consignment 1,76,505 MTs. of Iron Ore Pallets from Brazil The said consignment of iron ore pallets was brought at captive jetty at Hazira between 17-5-2001 and 19-6-2001. Appellant filed 15 BOE (each seeking clearance of 10,000 mts. of iron ore pellets) and was in the process of filing another three bills of entry for the balance quantity, when the customs authorities discovered that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 16-3-04 5. In the above background, the appellants were issued show cause notice dated 2-3-2005 seeking to disallow the Cenvat credit of duty availed by them on the strength of 12 assessed Bill, of entry, 2 bills of entry which were pending assessment and against TR-6 challans payment of CVD, for which bills or entry was accepted by the Revenue after the Settlement Commission's order and assessed thereafter, The notice raised under of grounds for denying the credit, inter alia that they had not maintained proper records as required under Rule 57A of the erstwhile Central Excise Rules, 1944/Rule 7 of Cenvat Credit Rules, 2001/2002; that there was a specific bar of such credit for availment in terms of Rule 57AE(1)(i) and Rule 7(1)(b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the bills of entry filed by the appellants cannot be considered to be supplementary invoices inasmuch as there was no sale of the goods involved. Appellants were themselves the importer of the goods and used the same in the manufacture of their final product. Accordingly, he dropped the above objection. He also agreed with the appellants that the entire disputed amount paid by them has to be treated as payment made against the bills of entry. He also agreed that the three bills of entry covering the balance of the goods were not allowed by the Department to be filed, which fact stands admitted by the Hon'ble Settlement Commission. However, he denied credit on the ground that the duty was paid as a result of fraud, collusion, suppress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed to be take advantage of its own refusal The anxiety of the adjudicating authority to deny credit on technical procedural grounds cannot be appreciated It is admitted on record that the entire duty on the inputs so received stands paid by the appellants, which inputs stand used by them in the manufacture final product cleared on payment duty, the denial of the substantive right of the appellant on hyper technical grounds cannot be upheld. No doubt, the appellants cleared the goods from their captive jetty without completing customs formalities For which purpose they may be penalized but the Modvat credit duty paid by them (may be subsequently in terms of the order of the Settlement Commission) cannot be disallowed. It also seen that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if the manufacturer does not take credit as soon as inputs are received in the factory he would be denied the benefit thereof" "Under the Cenvat Credit Rules, a manufacturer can take the minute the inputs are received in the factory. This however, does not mean, nor does it intended that if manufacturer does not take credit as soon inputs are received in the would be denied the benefit of Cenvat credit. Such an interpretation is not tenable". 11. Even otherwise appellant's right to avail Cenvat credit was protected by virtue of Section 38A of the Central Excise Act, 1944, which specifically provides that even if a rule is superseded as in the instants case, (Central Excise Rules, 1944 being superseded by Cenvat Credit Rules, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customs proceedings agreed to the fact that due records were maintained. This fact is clear from para 12 of the notice which reads as under: "It was further revealed from the scrutiny of various records seized, viz., daily production report, monthly statement showing date-wise receipt, consumption and closing stock including CVRD pellets and product despatch and closing stock of finished goods. PIC log books showing receipt and issue of various raw materials prepared on a daily basis, HBI ship report and jetty ship report, etc. that Essar Steel Ltd. had cleared separated CVRD pellets since 26-5-2001………" As such, the denial of credit on the above finding, which does not seem to be substantiated by any evidence and is against the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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